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US President Trump accuses both sides of violating

ceasefire

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Analysts see less risk to Middle East oil supplies

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Trump says China can continue to purchase oil from Iran

(Adds latest prices, changes dateline to New York from London)

By Scott DiSavino

NEW YORK, June 24 (Reuters) - Oil prices fell about 5%

to a two-week low on Tuesday on expectations the ceasefire

between Israel and Iran will reduce the risk of oil supply

disruptions in the Middle East.

That ceasefire, however, was on shaky ground with U.S.

President Donald Trump accusing both Israel and Iran of

violating it just hours after it was announced.

Brent crude futures fell $3.29, or 4.6%, to

$68.19 a barrel at 10:43 EDT (1443 GMT), while U.S. West Texas

Intermediate (WTI) crude fell $3.20, or 4.7%, to $65.31.

That put both contracts on track for their lowest closes

since June 10, before Israel launched a surprise attack on key

Iranian military and nuclear facilities on June 13.

Explosions rang out in Tehran on Tuesday despite Trump

saying Israel had called airstrikes off at his command to

preserve an hours-old ceasefire.

"I didn't like the fact that Israel unloaded right after

we made the deal. They didn't have to unload and I didn't like

the fact that the retaliation was very strong," Trump told

reporters.

Prices also fell as Trump posted on social media platform

Truth Social that China, the world's second biggest economy

behind the U.S., can now continue to purchase oil from Iran.

Israeli Defence Minister Israel Katz had said that he had

ordered its military to mount new strikes on targets in Tehran

in response to what he said were Iranian missiles fired in a

"blatant violation" of the ceasefire.

Iran denied launching any missiles.

The 12-day war has triggered high volatility in oil prices,

with Brent crude trading in an $11.86 range on Monday, its

widest since July 2022.

Both oil contracts settled more than 7% down in the previous

session, having rallied to five-month highs after the U.S.

attacked Iran's nuclear facilities over the weekend.

"Oil prices fell sharply, as U.S. strikes on Iranian nuclear

facilities failed to trigger a wider conflict that could pose a

threat to regional supplies," Barclays, a bank, said in a note

on Tuesday.

The direct U.S. involvement in the war also focused

investors on the Strait of Hormuz, a narrow waterway between

Iran and Oman, through which between 18 million and 19 million

barrels per day of crude oil and fuels flow, accounting for

nearly a fifth of global consumption.

In other supply news, Kazakhstan's state energy company

KazMunayGaz raised its forecast for oil output at the

Chevron ( CVX )-led Tengiz oilfield, the country's largest, to

35.7 million metric tons in 2025 from 34.8 million tons expected

previously, as it boosts output.

Kazakhstan is a member of the

OPEC+

group of countries that includes the Organization of the

Petroleum Exporting Countries (OPEC) and allies like Russia and

Kazakhstan.

"Prior to the outbreak of hostilities between Israel and

Iran, we had been suggesting a bearish stance mainly due to

increased

OPEC+

production that has prompted ample crude supplies, an

evolving dynamic that has intersected with expected demand

deterioration largely due to the Trump tariffs," analysts at

energy advisory firm Ritterbusch and Associates said in a note.